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PharMerica Learns the Hard Way: One Must Have a Trade Secret In Order to Survive a Motion for Summary Judgment
BlogTrade Secrets Trends

PharMerica Corporation (“PharMerica”) is a Delaware corporation headquartered in Louisville, Kentucky that provides institutional and hospital pharmacy services throughout the United States. The company filed a lawsuit in September 2016 in the Federal District Court of Pennsylvania alleging several employment and tort-related claims, and claims of misappropriation of Trade Secrets under the Pennsylvania Uniform Trade Secrets Act (“PUTSA”) and the Federal Defend Trade Secrets Act (“DTSA”) against former Pharmaceutical executive, Lena Sturgeon (“Sturgeon”) and ContinuaRx. ContinuaRx is a start-up, long term care pharmacy that serves facilities and institutions with pharmaceutical needs. While the DTSA and the PUTSA use different wording to define a trade secret, they essentially protect the same type of information, and create a private right of action for the misappropriation of trade secrets.

Sturgeon and ContinuaRx filed a Joint Motion for Summary Judgment alleging that PharMerica failed to show it has protectable trade secrets. At issue is whether PharMerica’s internal information about PharMerica’s service methods, market opportunities, marketing plans, current and prospective customers, and pricing information constitute protected trade secrets. On March 16, 2018, the judge sided with Sturgeon and ContinuaRx stating that while “PharMerica may have certain ‘trade secrets’ that deserve protection … in this instance [the company] failed to identify a single quality, attribute, or feature of any of these alleged trade secrets.”

Furthermore, PharMerica admitted that the majority of underlying materials that create its services, marketing opportunities, and pricing information are publically available, and “largely fixed by Medicare and Medicaid reimbursement rates.” Therefore, the court not only found that PharMerica failed to prove it had a protectable trade secret but also that there was no evidence that Sturgeon and/or ContinuaRx improperly acquired, disclosed, used, or threatened to use any specific trade secret.